Figure 6.5: Anon, ‘The Difference between Labor and Capital’, Life, c. 1887. Courtesy Huntingdon Library, California. From Monash University Publishing, Drawing the Line, Chapter 6. ‘All the World Over’ The Transnational World of Australian Radical and Labour Cartoonists

This view of Capital and Labor was not unique to the anonymous source; from the same year:

Figure 6.4: Phil May, ‘Poverty and Wealth; It all depends on the position of the bundle’, Bulletin, c. 1887. Courtesy State Library of New South Wales.

Capitalists appear to have all eaten well, well enough in the eye of the public that a fat man with a vest was quick, cartoonist shorthand for “capitalist.” If it did not apply in every case — see John D. Rockefeller, Andrew Carnegie, and the younger Cornelius Vanderbilt, for example — it applied often enough that “the fat guy” was instantly recognized as the capitalist, the factory owner, the boss.

27 Responses to Dramatic, graphic difference between Labor and Capital

Replace man with woman, wallet with purse, the argument remains the same.

Because you do not understand the economics of poverty, you make up stories in your head, hold beliefs about other people purses someone make yours larger or smaller, and demean the very system that has made YOU rich.

Everything you have, right now, comes from capitalists. You have a computer, house, a job … a life so rich that it should utterly astound you.

But because the system is quiet, gentle in its gifts, and surrounds you – you do not see it.

BF
Plough and scythe, really? Your outdated examples show your arguments are in the realm of mythical thinking. Sources of wealth and the great divides in inequality can be quantified and measured.

You think people are poor because they don’t know enough to save their money. Well, the average CEO pay is 237 times bigger than the average worker pay. Average CEO pay = 14.1 million dollars yet 15% of Americans live in poverty. Poverty is sometimes described as not even having enough money to meet basic needs. In that situation there is nothing available to save for the future or make huge investments in the market. Maybe you think they are lazy? Far too many are actually working — for minimum wage. And these facts don’t even paint the whole picture.

About half of the 1% did inherit their ‘earned’ wealth. But almost everyone on that list also inherited properties & family/social influence that don’t necessarily show up as earnings but are better indicators of their true wealth.

Who do you think received the billions of dollars spent in Iraq? It sure didn’t go to the soldiers who earn a pittance. How many of those billions of dollars went to the auto, tele-com, tech, munitions and petro chemical industries (all of which already were receiving huge government subsidies as standard operating procedure)? Who do you think now owns/controls the valuable Iraqi businesses that were ‘secured’ early on in the war? Or are you still thinking that war was about WMD?

i don’t want to go on with more examples. It is all too well documented. You can search for yourself if this interests you.

Ed, if you wish to reverse the “fat bellies”, one must educate labor in their choices.

Teach labor to reduce consumption under their production. This creates savings from which to participate in wealth creation.

Teach labor the difference between present time value and future time value – delaying consumption to the future allows greater consumption in the future or consumption earned by past efforts in that future without much further effort.

The demonization of the wealthy and the promotion that labor is a victim has dangerous, long term consequences.

Labor is paid presently, whereas the capitalist is reaps his profit in the future.

Labor, by their choice, has completely discounted any value of their labor in the future, and demands its payment now. By this decision, it has excluded itself from whatever profit such labor may produce in the future (and, equally, excluded itself from any such losses). Labor is risk-adverse in their choices.

Capitalists seek the return of value in the future for present losses. They absorb the present consumption in the belief that the future profit will be greater. Capitalists are risk-takers in their choices.

Believing labor “deserves” an un-invested piece of that future profit is terribly misguided.

It creates a condition where those that have discounted the future for fear of loss still demand the return of profit only when such loss is avoided. They avoid the risk, but demand wealth when that risk no longer exists. No cost, all benefit.

Forcing capitalists to pay such profit to riskless-profit seekers comes at the cost of capitalists equally not investing – for they absorb all the losses, but a substantially less recovery from potential future profit.

As there is a cost-less reward in getting both paid presently and receiving risk-less profit, attracts more people into this mode. The number of laborers goes up.

As there is great cost in risk, but an ever diminishing return of profit, this detracts from people investing. The number of investments and growth of wealth goes down.

Nice in theory but that isn’t what happened or what continues to happen. Most wealth is inherited from people who originally stole from others. Wealth continues today from government subsidies, imperial wars and the voodoo of the financial system.

Capital is the fruit of labor AFTER consumption – one’s savings. It only comes from those that consume less then they make.

One saves so to consume in the future. You take a bag of grain and store it so to consume it sometime in the future, when you want it.

These savings – delayed consumption – becomes valuable to others who need to consume what they do not have today in order to create surplus tomorrow – borrowers; or ‘present consumption’.

To balance the risk of losing one’s future consumption – a person can eat the grain today, and produce nothing back, starving the saver in his future – there is a price paid for such present consumption – a return on this investment. If such investments are done wisely, the creation of new wealth more covers the past consumption, and this return – leaving larger wealth to the early consumer he would not have had otherwise, and larger wealth for the investor which, he, too would not have otherwise.

Labor is the lowest form – anyone can dig a ditch.
It is the use of intelligence that magnifies wealth – knowing more what to do where then actually doing.

There is no debt to labor. They are paid what they demand. If they do not like the deal, they can find another better deal.

Because most people are like you – economically illiterate. They do not understand that digging a ditch is irrelevant without knowing where to dig such a ditch, nor understanding the value of such a ditch.

Labor is the highest form of wealth building. Labor is what separates modern humans from mere hunting and gathering. Without labor, there is no capital. Labor is the superior of capital, Lincoln observed, not wryly.

Be a capitalist, sure; don’t forget the debt you owe labor, especially the other guy’s, but yours as well.

One might reasonably wonder, if capitalists are not all fat guys oblivious to the suffering they cause around them, why do cartoonists get so much mileage portraying them that way?

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